Flight Crew taxes made simple

Are you an airline pilot or flight attendant? Do you pay taxes?! If so, you might be missing out on a large tax deduction for airline crew members, the per diem deduction.

What's a Per Diem Calculation?

Most airline pilots, flight attendants, and corporate flight crews are paid per diem while they are at work. Your company pays you a certain amount, no matter where you are. However, the government has established per diem rates depending on what city you are in. The difference between these rates and what you are getting paid is tax deductible!

Great, your thinking. But how do I figure out what per diem rates the government uses for the cities I have had overnights in? That's where we come in...

STOP! TAX CODE CHANGES!

Important changes to tax code for your 2018 return

On December 22nd, 2017, President Trump signed the Tax Cuts and Jobs Act. This new tax legislation had a major impact on flight crew taxes.

Most important is the elimination of the unreimbursed employee business expenses deduction beginning with 2018 tax returns.

Simply put - the provisions under which pilots and flight attendants could deduct their excess per diem, union dues, uniform items, and other job-related expenses, are GONE.

Starting with your 2018 tax return (filed early 2019), you no longer need to add up your trips to figure out your per diem calculation, as the deduction no longer applies.

The elimination of the deduction is not permanent. Barring further legislation the deduction will be reinstated beginning in 2026.

Please stay tuned to this area as we will post further information throughout January of 2019. Thank you to our customers for your support throughout the years.

The Difference can be Substantial

Your per diem calculation will depend on what cities you often lay over in, and how much your company has reimbursed you already. The difference can be substantial, and often results in several hundred dollars of credit on your income taxes!

Using our calculator, you can determine exactly how much the government allows for the cities you have overnighted in.

Take a Tour

Got 3 minutes?

See how you can use our website to turn your trips in to a per diem calculation, and how that affects your taxes.

Use the green arrows below to step through the tour.

STEP 1

Entering Your Trips

This is the bulk of the work to obtain your per diem calculation. The most common way to get your trips for the year is through your airlines scheduling software, but some flight crewmembers maintain logbooks.

In the example shown, this user has entered a 3 day trip that started on the 22nd. The first and last days of the trip get pro-rated to 75% per IRS guidelines.

STEP 2

Getting your total

As you enter your trips for the year, you will see your per diem calculation (or PDC) grow. If you choose to pay for our service AFTER entering your trips, you will see question marks. (Hover your mouse over the total on the right to see)

Many crew members choose to enter their trips prior to paying, but for this example, lets assume you have paid already. This user has a PDC of $13,203.75.

STEP 3

About the total

In our example, our user entered all their trips for the year and came up with a per diem calculation (or PDC) of:

$13,203.75

What is the significance of this number? This is the amount, based on the cities you overnighted in, that the government thinks you should have been reimbursed in per diem. Lets see how this plays in to your taxes...

STEP 4

What you were reimbursed

Now lets take a look at what you were reimbursed. There are generally two ways to get this amount.

The first and most reliable way is off your W-2, which is pictured. Different companies generate different W-2's, but in this example it is in box 12 under the "L" code. If this isn't available on your W-2, check your end of year paycheck for the amount.

For the year, this user was reimbursed $4,783.29 in per diem.

STEP 5

Tying it together

At this point, you have your per diem calculation and your reimbursed per-diem:

$13,203.75 - $4,783.29 = $8,420.46

Now you have the difference between what the government thought you should have been reimbursed, and what you actually got reimbursed. In our example it is $8,420.46

But wait... there's more!

STEP 6

Transportation workers

The bad news is, the IRS isn't going to let you take the full amount of the $8,420.46 as a deduction. Whats the good news? The IRS treats flight crew members special, and allows transportation workers to take 80% of the difference instead of the normal 50%.

$8,420.46 x 80% = $6,736.37

This is essentially how your per diem calculation (PDC) is going to impact your taxes as far as deductions go (The IRS does require you to subtract 2% of your gross income off of your work expenses).

STEP 7

So many figures

Overwhelmed with numbers? Don't be, our system makes it easy. Remember, it all starts with the "PDC"! In our example:

$13,203.75

This is the number that gets the flight crew portion of your taxes started. This is the number that you find using our website. This is your PER DIEM CALCULATION!